PM instructs central bank to enhance early warning system

PM instructs central bank to enhance early warning system

The SBV must require credit institutions to enhance their governance, financial strength, risk management and internal control capabilities.

The headquarters of the State Bank of Vietnam (SBV). The PM directed the SBV to restructure the system of credit institutions and address bad debts. Photo sbv.gov.vn

Prime Minister Lê Minh Hưng has directed the State Bank of Vietnam (SBV) to enhance the effectiveness of inspection, supervision and early warning activities to quickly identify and address risks and violations, ensuring system safety.

According to the recent Resolution 262/NQ-CP assigning specific tasks to ministries, agencies and localities in the remaining months of this year, the SBV must to require credit institutions to enhance their governance, financial strength, risk management and internal control capabilities.

Credit institutions are also directed to strictly comply with safety limits and tightly control transactions with shareholders and related parties.

The PM also directed the SBV to restructure the system of credit institutions and address bad debts. The SBV must strengthen supervision and effectively carry out resolution plans for poor-performing credit institutions under its special control, including the acceleration to handle collateral assets associated with the Sai Gon Joint Stock Commercial Bank.

Hưng said the SBV needs to manage monetary policy flexibly and effectively. This management must be coordinated with fiscal and other macroeconomic policies to help control inflation, maintain macroeconomic stability, ensure major economic balances and the safety of the credit institution system, and support double-digit economic growth.

Exchange rates must be managed flexibly and in line with market developments. Foreign currency supply and demand in the domestic market should be closely monitored at any given time to enable the SBV to devise market management plans and readily intervene to stabilise the foreign currency market, contributing to macroeconomic stability and inflation control.

The PM also directed the SBV to manage credit growth in a flexible manner, and to instruct credit institutions to channel credit capital toward production, business, exports, high-tech sectors, innovation, supporting industries, social housing, rental housing, essential infrastructure, priority sectors and key growth drivers. 

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